Definitions and data dearth

We really don't know much about the craft brewing sector, but I've got a cunning idea...

ANZ published its annual Industry Insights report on craft brewing this month. This is the third year the report has been published. It’s a simple report – ten pages and heavy on the infographics.

Once again, it showed how little we know about craft brewing, compared to other industries. There’s very little hard data available, but Beertown.NZ has asked Statistics NZ to research craft’s growth and market share.

ANZ’s report now has already made a tradition for generating comment and criticism. Mainstream media covered it briefly here and here, looking at the growth in production and exports.

Bar owner and craft beer importer Dominic Kelly criticised it here, in his first blog in nearly a year. Dominic cited the lack of a definition of craft beer, calling it “sheer academic negligence”. He made the same criticism last year: “But there’s no definition of ‘NZ Brewed Craft’, which is enormously problematic given that the meaning of ‘craft beer’ may just be the most contentious topic in the brewing industry.”

Dominic’s criticism is right but irrelevant. He’s quite right to say you cannot analyse what you don’t define. But that is irrelevant when there’s very little data to divide into ‘craft’ and ‘other’. You cannot analyse what you don’t measure.

Imagine, for a moment, ANZ had produced the perfect definition of craft beer – black & white split; using verified third-party data; compatible with all overseas definitions; entirely future-proof; and universally agreed and accepted by all craft-beer commentators inside and outside the industry.

Now, pour yourself a Tui and ask this – what use would that definition be, when there are no data to define?

It’s not as if New Zealand has a beer census, and all we need to do is isolate the data from craft brewers. In fact, we know less about the brewing industry than we do about most industries.

Most of my career has involved researching and writing about the retail industry. Statistics NZ produces quarterly reports on retail turnover, broken down into different sectors and regions. Several retailers are listed on the stock exchange and publish audited accounts every year. Retailers are as secretive as any other industry when it comes to commercially sensitive information, but there’s enough light on the industry to get an idea of what’s going on.

In contrast, Moa is the sole craft brewer on the stock exchange. Three others – Renaissance, Yeastie Boys and ParrotDog – have crowdfunding shareholders, but their accounts are private, unaudited and incompatible. Lion and DB publish accounts as overseas-owned businesses, but they are not craft brewers and have business outside brewing. There’s very little light shed on the craft brewing industry itself.

That’s why ANZ has been clever to proceed without a definition. As Dominic Kelly says, the definition would be “most contentious” and probably gain more attention than the report itself. Better to acknowledge the lack of hard data, the lack of a definition, and make the best of the information available. The alternative is to ignore craft brewing.

ANZ’s 2016 report is an improvement over the 2015 edition, which I thought gave too much credibility to weak data and so leapt to some questionable conclusions. This year’s report had more text and less data, and so inevitably attracts criticisms for being vague.

The only official data published on the brewing industry is the annual Alcohol Available for Consumption data. This is a summary of data gathered by Customs when it collects excise payments, and it’s released once a year.

I have asked Statistics NZ to mine this data to isolate the figures relating to craft brewers. Specifically, I’ve asked to isolate those business producing less than X% of national production, combine their output into a craft beer subtotal, and do this for 2013, '14 and '15.

This may not be possible, due to privacy, the way data are gathered, or the time/cost of extracting them. But so far, so good – Statistics NZ told me yesterday “this data may be technically possible to extract for you”. I will be working with the team to see what we can dig out.

If Statistics NZ produces the data, this will be the first time we have verified third-party figures on craft beer’s market share and growth. If any Guilds, banks, importers or bloggers feel like getting involved, please contact me directly.